Former Bank of Israel governor Jacob Frenkel withdrew his nomination on Monday
to return to the position, following an ongoing scandal over an alleged
shoplifting incident at a duty free shop in a Hong Kong
airport.

Frenkel’s return to the post has hit a number of road bumps
since his nomination in late June. First, a scandal reemerged over the bloated
compensation package he received following his first term, which lasted from
1991 to 2000. The state comptroller at the time forced Frenkel to return NIS
238,000 to the government. The Turkel Committee, appointed to evaluate Frenkel’s
nomination, said in early July that it would set the incident aside.

The
next bump, which ultimately proved his undoing, followed a Haaretz report that
Frenkel was detained at a Hong Kong airport in 2006 over allegedly shoplifting a bottle of
perfume.

Though Frenkel claimed the incident was a “misunderstanding,”
the fact that he did not report it to the commission posed a further legal
hurdle. Attorney-General Yehuda Weinstein had opened an investigation into the
matter.

“In an unreasonable and intolerable way, they put a man on the
stakes without all the facts, simply based on speculation,” Frenkel wrote in his
statement, according to Channel 2.

The fact that Frenkel had served as
vice chairman of the international insurance group AIG from 2004-2009, the years
leading up to its spectacular near-failure in the 2008 financial crisis, went
largely unmentioned.

“Of course whoever knows the truth knows – The
Turkel Committee knows, I know – but there is no room to continue in this
process,” Frenkel wrote in his statement. “I came to that conclusion and
notified the prime minister and finance minister that I am withdrawing my
nomination.

“I am, of course, very sorry about that, because I hoped to
aid the effort, to help close the gaps in Israel, to help curb the cost of
housing, to help the middle class, and I will continue to do so as much as
possible from other places.”

“In the atmosphere that exists today, we are not far
from the day that nobody will want to go near public life,” they
said.

The two added that they would choose another nominee in the coming
days.

Lapid further lamented the “missed opportunity” in a Facebook post,
slamming the media for the circus surrounding Frenkel’s
nomination.

“Frenkel could have been exactly what we needed,” the former
journalist wrote. “A man of 70, an Israel Prize winner, one of the world’s most
respected economists suddenly discovered that anyone who has a keyboard can
sully and slander and write terrible things about him that were not even
checked.”

Frenkel was poised to replace Stanley Fischer, who stepped down
at the end of June after eight years in the role. Fischer’s deputy, Karnit Flug,
has served as acting governor since his departure.

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